| Exception
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(7) If, under subsection (1), a bank acquires
control of, or acquires or increases a
substantial investment in, an entity that it
would otherwise be permitted to acquire or
increase under section 468, the bank may
retain control of the entity or continue to hold
the substantial investment for an
indeterminate period, if the approval in
writing of the Minister is obtained before the
end of the period referred to in subsection (2)
or (3), including any extension of it granted
under subsection (4).
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| Realizations
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473. (1) Despite anything in this Act, a bank
may acquire
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(a) an investment in a body corporate,
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(b) an interest in an unincorporated entity,
or
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(c) an interest in real property
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if the investment or interest is acquired
through the realization of a security interest
held by the bank or any of its subsidiaries.
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| Disposition
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(2) Subject to subsection 73(2), if a bank
acquires control of, or acquires a substantial
investment in, an entity by way of the
realization of a security interest held by the
bank or any of its subsidiaries, the bank shall,
within five years after the day on which
control or the substantial investment is
acquired, do all things necessary, or cause its
subsidiary to do all things necessary, as the
case may be, to ensure that the bank no longer
controls the entity or has a substantial
investment in the entity.
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| Transitional
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(3) Despite subsection (2), if a bank that was
in existence immediately before June 1, 1992
had an investment in an entity on September
27, 1990 that is a substantial investment
within the meaning of section 10 and the bank
later increases that substantial investment by
way of a realization of a security interest under
subsection (1), the bank shall, within five
years after increasing the substantial
investment, do all things necessary to ensure
that its substantial investment in the entity is
no greater than it was on September 27, 1990.
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| Extension
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(4) The Superintendent may, in the case of
any particular bank that makes an application
under this subsection, extend the period
referred to in subsection (2) or (3) for any
further period or periods, and on any terms and
conditions, that the Superintendent considers
necessary.
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| Exception
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(5) If, under subsection (1), a bank acquires
control of, or acquires or increases a
substantial investment in, an entity that it
would otherwise be permitted to acquire or
increase under section 468, the bank may
retain control of the entity or continue to hold
the substantial investment for an
indeterminate period if the approval in writing
of the Minister is obtained before the end of
the period referred to in subsection (2) or (3),
including any extension of it granted under
subsection (4).
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| Regulations
restricting
ownership
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474. The Governor in Council may make
regulations
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(a) permitting the acquisition of control or
the acquisition or increase of substantial
investments for the purposes of subsection
468(4);
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(b) prescribing the circumstances under
which subsection 468(5) or (6) does not
apply, or the entities in respect of which
those subsections, or either of them, do not
apply, including prescribing entities on the
basis of the activities they engage in;
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(c) for the purposes of subsection 468(11),
permitting a bank to give up control of an
entity; and
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(d) restricting the ownership by a bank of
shares of a body corporate or of ownership
interests in an unincorporated entity under
sections 468 to 473 and imposing terms and
conditions applicable to banks that own
such shares or interests.
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| Exclusion
from portfolio
limits
|
475. (1) Subject to subsection (3), the value
of all loans, investments and interests
acquired by a bank and any of its prescribed
subsidiaries under section 472 or as a result of
a realization of a security interest is not to be
included in calculating the value of loans,
investments and interests of the bank and its
prescribed subsidiaries under sections 476 to
478
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(a) for a period of twelve years following
the day on which the interest was acquired,
in the case of an interest in real property;
and
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(b) for a period of five years after the day on
which the loan, investment or interest was
acquired, in the case of a loan, investment
or interest, other than an interest in real
property.
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| Extension
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(2) The Superintendent may, in the case of
any particular bank, extend any period
referred to in subsection (1) for any further
period or periods, and on any terms and
conditions, that the Superintendent considers
necessary.
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| Exception
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(3) Subsection (1) does not apply to an
investment or interest described in that
subsection if the investment or interest is
defined by a regulation made under section
479 to be an interest in real property and
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(a) the bank or the subsidiary acquired the
investment or interest as a result of the
realization of a security interest securing a
loan that was defined by a regulation made
under section 479 to be an interest in real
property; or
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(b) the bank or the subsidiary acquired the
investment or interest under section 472 as
a result of a default referred to in that
section in respect of a loan that was defined
by a regulation made under section 479 to
be an interest in real property.
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| Limit on total
property
interest
|
476. A bank shall not, and shall not permit
its prescribed subsidiaries to, purchase or
otherwise acquire an interest in real property
or make an improvement to any real property
in which the bank or any of its prescribed
subsidiaries has an interest if the aggregate
value of all interests of the bank in real
property exceeds, or the acquisition of the
interest or the making of the improvement
would cause that aggregate value to exceed,
the prescribed percentage of the regulatory
capital of the bank.
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| Limits on
equity
acquisitions
|
477. A bank shall not, and shall not permit
its prescribed subsidiaries to,
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(a) purchase or otherwise acquire any
participating shares of any body corporate
or any ownership interests in any
unincorporated entity, other than those of a
permitted entity in which the bank has, or
by virtue of the acquisition would have, a
substantial investment, or
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(b) acquire control of an entity that holds
shares or ownership interests referred to in
paragraph (a),
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if the aggregate value of
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(c) all participating shares, excluding
participating shares of permitted entities in
which the bank has a substantial
investment, and
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(d) all ownership interests in
unincorporated entities, other than
ownership interests in permitted entities in
which the bank has a substantial
investment,
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beneficially owned by the bank and its
prescribed subsidiaries, exceeds, or the
purchase or acquisition would cause that
aggregate value to exceed, the prescribed
percentage of the regulatory capital of the
bank.
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| Aggregate
limit
|
478. A bank shall not, and shall not permit
its prescribed subsidiaries to,
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(a) purchase or otherwise acquire
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(i) participating shares of a body
corporate, other than those of a permitted
entity in which the bank has, or by virtue
of the acquisition would have, a
substantial investment,
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(ii) ownership interests in an
unincorporated entity, other than
ownership interests in a permitted entity
in which the bank has a substantial
investment, or
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(iii) interests in real property, or
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(b) make an improvement to real property
in which the bank or any of its prescribed
subsidiaries has an interest
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if the aggregate value of
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(c) all participating shares and ownership
interests referred to in subparagraphs (a)(i)
and (ii) that are beneficially owned by the
bank and its prescribed subsidiaries, and
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(d) all interests of the bank in real property
referred to in subparagraph (a)(iii)
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exceeds, or the acquisition or the making of
the improvement would cause that aggregate
value to exceed, the prescribed percentage of
the regulatory capital of the bank.
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| Regulations
|
479. For the purposes of this Part, the
Governor in Council may make regulations
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(a) defining the interests of a bank in real
property;
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(b) determining the method of valuing those
interests; or
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(c) exempting classes of banks from the
application of sections 475 to 478.
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| Divestment
order
|
480. (1) The Superintendent may, by order,
direct a bank to dispose of, within any period
that the Superintendent considers reasonable,
any loan, investment or interest made or
acquired in contravention of this Part.
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| Divestment
order
|
(2) If, in the opinion of the Superintendent,
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(a) an investment by a bank or any entity it
controls in shares of a body corporate or in
ownership interests in an unincorporated
entity enables the bank to control the body
corporate or the unincorporated entity, or
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(b) the bank or any entity it controls has
entered into an arrangement whereby it or
its nominee may veto any proposal put
before
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(i) the board of directors of a body
corporate, or
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(ii) a similar group or committee of an
unincorporated entity,
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or whereby no proposal may be approved
except with the consent of the bank, the
entity it controls or the nominee,
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the Superintendent may, by order, require the
bank, within any period that the
Superintendent considers reasonable, to do all
things necessary to ensure that the bank no
longer controls the body corporate or
unincorporated entity or has the ability to veto
or otherwise defeat any proposal referred to in
paragraph (b).
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| Divestment
order
|
(3) If
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(i) fails to provide or obtain within a
reasonable time the undertakings
referred to in subsection 470(1), (2) or
(4), or
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(ii) is in default of an undertaking
referred to in subsection 470(1) or (2) and
the default is not remedied within ninety
days after the day of receipt by the bank
of a notice from the Superintendent of the
default, or
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(b) a permitted entity referred to in
subsection 470(4) is in default of an
undertaking referred to in that subsection
and the default is not remedied within
ninety days after the day of receipt by the
bank of a notice from the Superintendent of
the default,
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the Superintendent may, by order, require the
bank, within any period that the
Superintendent considers reasonable, to do all
things necessary to ensure that the bank no
longer has a substantial investment in the
entity to which the undertaking relates.
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| Exception
|
(4) Subsection (2) does not apply in respect
of an entity in which a bank has a substantial
investment permitted by this Part.
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| Deemed
temporary
investment
|
481. If a bank controls or has a substantial
investment in an entity as permitted by this
Part and the bank becomes aware of a change
in the business or affairs of the entity that, if
the change had taken place before the
acquisition of control or of the substantial
investment, would have caused the entity not
to be a permitted entity or would have been
such that approval for the acquisition would
have been required under subsection 468(5) or
(6), the bank is deemed to have acquired, on
the day the bank becomes aware of the change,
a temporary investment in respect of which
section 471 applies.
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| Asset
transactions
|
482. (1) A bank shall not, and shall not
permit its subsidiaries to, without the approval
of the Superintendent, acquire assets from a
person or transfer assets to a person if
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A + B > C
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where
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A is the value of the assets;
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B is the total value of all assets that the bank
and its subsidiaries acquired from or
transferred to that person in the twelve
months ending immediately before the
acquisition or transfer; and
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C is ten per cent of the value of the total
assets of the bank, as shown in the last
annual statement of the bank prepared
before the acquisition or transfer.
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| Exception
|
(2) The prohibition in subsection (1) does
not apply in respect of
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(a) assets that are debt obligations that are
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(i) guaranteed by any financial institution
other than the bank,
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(ii) fully secured by deposits with any
financial institution, including the bank,
or
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(iii) fully secured by debt obligations that
are guaranteed by any financial
institution other than the bank;
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(b) assets that are debt obligations issued
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(i) by, or by any agency of,
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(A) the Government of Canada,
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(B) the government of a province,
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(D) the government of a foreign
country or any political subdivision of
a foreign country, or
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(ii) by a prescribed international agency;
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(c) assets that are debt obligations that are
guaranteed by, or fully secured by securities
issued by, a government, a municipality or
an agency referred to in paragraph (b);
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(d) assets that are debt obligations that are
widely distributed, as that expression is
defined by the regulations;
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(e) assets that are debt obligations of an
entity controlled by the bank; or
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(f) a transaction or series of transactions by
the bank with another financial institution
as a result of the bank's participation in one
or more syndicated loans with that financial
institution.
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| Exception
|
(3) The approval of the Superintendent is
not required if
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(a) the bank sells assets under a sale
agreement that is approved by the Minister
under section 236;
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(b) the bank or its subsidiary acquires shares
of, or ownership interests in, an entity for
which the approval of the Minister under
Part VII or subsection 468(5) is required or
the approval of the Superintendent under
subsection 468(6) is required; or
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(c) the transaction has been approved by the
Minister under subsection 678(1) of this
Act or subsection 715(1) of the Insurance
Companies Act.
|
|
| Value of
assets
|
(4) For the purposes of ``A'' in subsection
(1), the value of the assets is
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(a) in the case of assets that are acquired, the
purchase price of the assets or, if the assets
are shares of, or ownership interests in, an
entity the assets of which will be included
in the annual statement of the bank after the
acquisition, the fair market value of the
assets; and
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(b) in the case of assets that are transferred,
the book value of the assets as stated in the
last annual statement of the bank prepared
before the transfer or, if the assets are shares
of, or ownership interests in, an entity the
assets of which were included in the last
annual statement of the bank before the
transfer, the value of the assets as stated in
the annual statement.
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